Without comment, the high court let stand decisions by a federal judge in Indiana and the U.S. 7th Circuit Court of Appeals in Chicago that prevented the measure from taking effect. The 2011 law would have banned Medicaid funds from going to an organization such as Planned Parenthood whose work includes performing abortions.

Judge Diane S. Sykes, writing for the 7th Circuit last year, said the state's "defunding law excludes Planned Parenthood from Medicaid for a reason unrelated to its fitness to provide medical services, violating its patients' statutory right to obtain medical care from the qualified provider of their choice."

The Obama administration had joined the case on the side of Planned Parenthood and argued that the Medicaid law gives eligible low-income patients a right to obtain healthcare from any qualified provider. This is known as the free-choice-of-provider rule.

More than 9,300 Medicaid patients in Indiana go to Planned Parenthood clinics for routine medical exams, cancer screening and birth control, the lower court said. Medicaid does not pay for abortions because by law, Congress has forbid the spending of federal funds to pay for elective abortions. Indiana has a similar provision in state law.

Two years ago, Indiana lawmakers voted to go further and forbid the spending of any Medicaid money — federal or state — through "any entity" whose facilities perform abortions. Hospitals and state-licensed surgical clinics were exempted. Though the federal government pays most of the cost for providing healthcare under Medicaid, the money is funneled through a state agency. Had the state law stood, it would have stopped the federal money from flowing to clinics, and many of them would have been forced to close, Planned Parenthood officials said.

Before the Indiana law could go into effect, the group's lawyers went to federal court and sued on behalf of a doctor, a nurse and two patients. That led to the court orders that blocked the law.

Notre Dame Law School professor O. Carter Snead called the outcome "deplorable" and said it offered "a grim reminder of the Obama administration's unswerving commitment to Planned Parenthood, the nation's largest abortion provider." He said the only legal remedy was to have Congress revise the Medicaid Act.

Cecile Richards, president of the Planned Parenthood Federation of America, welcomed the court's decision.

"Today's announcement from the Supreme Court is not only a victory for Planned Parenthood's patients in Indiana, it is a victory for the nearly 3 million people who turn to Planned Parenthood health centers each year across the country," she said.